Turkey To Keep Interest Rate Steady

last updated on

Turkey To Keep Interest Rate Steady

Turkey To Keep Interest Rate At 45%, End Of Tightening Cycle In Sight.

According to a forecast from a group of economists, Turkey's central bank is done with the tightening cycle. This means the next meeting will not lead to any rate hikes.

That's why it is safe to say that the interest rate in Turkey will remain unchanged at 45%. During the last month, the central bank hiked the rate by 2.5% (250 bps), one of the country's most aggressive tightening campaigns ever seen.

No More Rate Hikes In 2024

total of 11 economists have shared this insight, concluding that any more rate hikes from Turkey's central bank are not impossible at the moment.

Ever since President Erdogan won the elections in May, the country's economic policy has also taken a U-turn. As a result, the central bank delivered around 3650 bps (36.5%) worth of rate hikes.

During the last meeting, the bank clarified that its policy was enough to meet the disinflation goals. They also added that it will help maintain the negative trend in monthly inflation.

Turkey's central bank hopes for an inflation target of 36% by the end of year 2024. Given the country's current inflation levels, it is highly likely to expect any rate cuts from the central bank.

Another hint given by Turkey's central bank was that there is no need for another rate hike. But when asked about the prospects of easing, he said it is still too early to discuss it.

By the end of 2024, the interest rate in Turkey is forecasted to be near 37.5%. However, there is also one expert who believes that it will remain near 45% even by the end of 2024.

Just a month ago, the annual inflation in Turkey touched 64.9%, with an increase of 6.7% M/M. This was also driven mainly by the rise in minimum wage (49% jump) and an increase in various items.

Trending Stories